winning. >> bill and jeff, always good to talk to you. see you next time. we should mention the dow has gone positive. we have bernanke talking in about 15 minutes, so we'll send it back to headquarters, wapner and the fast money halftime. welcome to the halftime show, everyone. four hours to go to the close. we've turned positive. take a look at the major averages. the dow largely in negative territory for much of the morning. now positive by some nine points. s&p nasdaq following suit. we're following two key stories at this hour. after two days of rallying on newfound optimism over the fiscal cliff, the markets enter a critical phase and where stocks go from here could hinge on what's said inside the marriott hotel. steve liesman is there. we'll be hearing from him in a moment.

we're also foe lowing what the feds call the most lucrative inside trading scheme ever. we go will to the formal announcement by the charges of the u.s. attorney. we will take you there live as well. but first, we meet the traders for the hour. steven weiss, joe and john naje najerayan, so a lot of digest. steve, you have this market rally, trying to go for a third straight day. going to be listening closely to the fed chairman in new york. >> i don't think bernanke is going to affect the rally one way or the other. what's driving the market is optimism over avoiding fiscal cliff and a deal, so the caution i would offer is that negotiations are going to make their way to the headlines and just be prepared for volatility. i think now, this allows us to move higher because the big decline we have, but at some point, you've got the say okay, we're going to get some big

sells in front of the new tax laws. we've seen big dividend payments. you also have to watch dividend stocks, but it's not going to be smooth sailing going forward. >> joe, you can get some clues today on future stimulus. by the fed when he spoke speaks in manhattan. also likely get questions about the fiscal cliff. >> absolutely and i think there is no doubt that global monetary policy will continue to ease. i think ben pen will step to the plate and allow everyone to know that the december meeting that's certainly the calendar guidance they have mid 2015, that will hold serve, but just in terms of market itself, there's a psychological term that's going on and you have a lot of institutional money managers that move to the sidelines. they're looking at a tape and it's not going down.

they're slowly having to be in the market once again. >> well, psychology hasn't really changed. take a look at what the stocks are doing. ten-year lows. it's come a little bit off its lowest levels. still looking at a 10% decline today for shares of hewlett-packard. in you were watching cnbc in july, he said it have the autonomy deal that made him interested in shorting hp. let's take a listen. >> bought this company for $11 billion. it was a roll up of software service companies. the accounting was dreadful. a disaster. they did almost no due diligence on the deal. it closed quickly. oracle was shown the deal and passed and within seven months, the ceo left. >> that was cheno at our event back in the summer, but let's welcome in paul meeks, senior analyst and director of

institutional investing at seterna. welcome. >> thank you very much. >> as if there wasn't enough to worry about. you have the business and business model going forward and now, this. >> oh, i concur. the autonomy news i was expected write off, a sizable write off, but the accusations of fraud are very, what does it speak to what's going on at hewlett-packard and i guess you could take it on a lack of diligence some would say surrounded the autonomy deal, but the overall stlat ji in general of these acquisitionacq. >> i don't know if i necessarily disagree with the acquisitions. they had to get in the software space and i think they still have to get in software space. same goes for services. the due diligence, remember this was conducted by a board, but

they had not one, but two blue chip accounting firms, but the real drivers are hp long gone and -- is it bad, yeah? do i think they're going to right thing to boost these two businesses? i think they are. i would be surprised with more due diligence if think did not in these critical areas continue to do probably smaller, but still do acquisitions. >> is it finally time to just split the differences? is given bill george on the previous program saying it's just time to split these companies up. hardware printers on one side. services software and anything else on the other? >> i did hear that comment from the previous segment. i think not. because meg whitman did come in and speak to a lot of these enterprise i.t. customers and

did a real in deep approach to the situation and do think that companies that are buying tech gear would like to continue to have a dominant brand, a dominant one-stop shop. i think in the near term if they did announce a split, it would go up. in the long-term, i still think these businesses can do okay together. remember, the guidance for this company going forward is to grow even after the restructuring, maybe at better pace. >> paul, thanks so much. >> thank you. paul meeks, again, with seterna capital. doc, would you buy? >> i am so tempted to. it's been a value trap. karen finer man has said that many times. i am really tempted. this is october of 2002 lows an at this level, with still the

revenue they did put up, scott, 30 plus billion dollars, i can't believe that the company's just going away. it's certainly been mismanaged in the past. i think meg's going to turn that around. >> let me just read this headline at the bottom of the screen. the s.e.c. chairman that according to the "wall street journal", mary shapiro, may leave her term before the end of the year. interesting this news comes on a day when we're going to hear about what the feds call and you're going to hear from the new york attorney for the southern district of new york at the bottom of the hour on what they call the most lucrative insider trading case, the biggest scream in risry. so all that is straight ahead. also, coming up, big ben's speech is just minneapolis away. we'll tacking whether he has the right recipe for the economy and the ris bs associated with the fiscal cliff.

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welcome back to the halftime show. we are waiting on ben bernanke to speak. that's the lecturn before which he will appear. and then at the bottom of the hour, we're going to hear from the u.s. attorney for the southern district of new york. we're expecting him to lay out the charges of what he calls the most lucrative insider trading scheme ever. you will hear both men live today on the halftime show. meantime, it is time for our top three trades. our first up is best buy. it's getting slammed after reporting lower than expected third quarter earnings. >> international, terrible. gross margins, terrible. inventory rises 4.8%. my call to own options into thanksgiving, terrible. the only hope for this company, take private and the price just got a lot cheaper.

>> absolutely. doc? >> as far as best buy, i think still still stay away because their margins are going tom compressed. it's going to make sales, but not profitable sales. >> take a look at the homebuilders getting a pop as housing starts rise to their lowest rate in more than four years. two days in a row now where you have sentiment yesterday was a higher level in a number of years and now, this. just more evidence of a comeback in housing. >> it sure is. low interest rates are helping that. none the less, housing on a tear. you look at the xhb, up 50%. whirlpool, up over 110%. masc ork, up 100%. these are the names you continue to watch and i think a lot of the replacement from sandy is going to play into whirlpool. >> what about research in motion today got an upgrade at jefferies?

>> you go near this one? >> i bought it last week, added to yesterday. part of it is is driven by the fact that i think that the move in apple stock was sort of like harboring the place to be, which was in iphones. the antiblackberry move. now, i just got an iphone 5, been a lifelong blackberry user, life of their company and i'm dying for the new vp 10 to come out and i don't find apple very good for e-mail. >> i can't even believe what i'm hearing here. for a guy who i mean -- >> here, take the blackberry. >> on some of the other names, you're singing the praises of research in motion at a time where you'd be the first guy on my list to say that i wouldn't go near this with a ten-foot pole, that i'm short the name, but yet you like it. >> right.

because i think there's going to be inkreeing chatter, positive chatter, about the new blackberry coming out. on january 3rd. gave us a date. don't forget, they paid apps providers $10,000 to come out with apps, so they targeted 30,000 apps, but nobody uses half a million. so bottom line is sentiment improving. i can tell you from a senate standpoint, i can't tell you i will be there when the new product comes out. i've got a target near term about 11. if it gets there, i'm very happ happy. i'll reassess that point. >> the one-month chart is hard to argue with with. >> during the commercial break, let him play with these. >> i've got it, but that's old technology. the new blackberry technology bears no resemblance. >> terra nova on the show called apple a generational buy. and bought the stock. are you saying you're suddenly negative on america's most

valuable company, loved by everybody and owned by many of the people you speak to on a regular basis who run some of the biggest money on the street? >> not at ul. i like the stock. i don't own it. i think it is a very, very cheap stock. i agree with joe. >> the fed chairman is speaking now in new york. let's go to steve liesman. >> scott, thanks so much. ben bernanke speaking to the economic club of new york made some strong comments on the fiscal cliff and some interesting comments on the economy. let's talk about the fiscal cliff first, he's saying the congress and administration need to quote protect the economy from the full effects of the fiscal cliff. he's saying it poses a substantial threat to the recovery. quote saying it will likely cause a recession if it hits in full force. the budget situation by affecting private sending the already hurting the economy according to the fed chairman. he's urging also, not just

solving the fiscal cliff problem, but raising the debt ceiling, saying a catastrophic default of the nation's debt obligations. credible fiscal policy is urgently needed to ensure long-term growth. doesn't want immediate restraint in fiscal spending. on the economy, says it continues to recover though the pace of the recovery is slow. job growth he says is recovering, but again, it is slow. some good things so say about housing, saying it has recovered, but he's also saying there are head winds from housing. europe and the financial sector. now, i want to get to one thing he talks about, which is interesting. he's suggesting that the financial crisis may have reduced at least temporarily, the potential of the economy. that's an important number for economists. it suggests the number of

cylinders we have to really do economic growth around here and several of them have not been firing, but maybe there are fewer of them. he's saying it could be lower than two and a half percent and talks a bit about lowering the potential of growth as one reason with a slow pace of economic growth. we're going to have to think more about that and figure out what he means by that, but temporarily, he's suggesting gdp could be lower than 2.5%. back to you guys. >> let me just ask you quickly as we wait for the fed chairman to actually make these remarks in front of the economic club. t he's saying don't look to me for more monetary policy. what we need is some sound fiscal policy and you guys better get your act together on capitol hill. >> absolutely, scott. he goes through a very long list of things the federal reserve has done and is doing and really makes no change at all as expecteded in the qe programs o

f of the fed and they're going to revisit the end of operation twist at the upcoming meeting in december. he's saying look, this is one of the big things that's within our control is the fiscal cliff and he's also bringing out the debt ceiling and suggesting you know what? there could be some upside from reducing those head winds. >> if he make ts a statement to the effect of the financial crisis reducing potential of the economy that you're looking at gdp potential, could be lower than 2.5%, does that tell us that the fed is likely to be more active for a longer period of time as a result of that? does it change the thinking at all inside the room? >> scott, you just got at the thing that i said earlier, we have to think more about what that means for fed policy. on the one hand, lower potential growth could mean inflation would hit sooner because it means total capacity of the economy may be smaller than we

thought and this idea of temporarily lowering potential, it's like an oxy moron because potential is thought to be a long run concept and he's saying the crisis may have temporarily lowered it, but he says ending the crisis, moving away from that, could heal the effects. i'm sorry i don't have an easy answer for you, but it is one of those things, i haven't heard it before. it's new thinking from the fed chairman about the effects and my guess, we're going to have a lot of analysis, but one thing it could mean is a quicker effect on employment if we have decent economic growth. he points out that maybe the potential is lower and that's why 2% growth has been enough to reduce the unemployment rate. but it also means the fed could be quicker on the trigger if inflation could become a problem. >> it's the very conversation going on inside the fed these

days. how to tell the fed when the raise interest rates rates as yellin has suggested whether it's the inflation at 3% or unemployment falling to 7, right? >> you're exactly right. should they move for example from the guidance that we're going to stay low through mid 2015 and instead, give the market economic targets. the reason think haven't done economic targets is what you said, scott. they can't agree on those. so, there's the idea, i think they're pretty much in agreement, 7% is the rate that should trigger the fed's halting its easy economic policy or moving away from it. they can't decide on the other end, the inflation end is place where they're concerned right now and where there's disagreement. i will tell you in the speech, bernanke said he believes unemployment is 2 to 2.5% what he believes to be the long-term

rate. what is it now? 7 it's 7.9%, so you're talking 5.5, 6% would be the place where the fed would think the long run rate. >> all right, steve, we'll look forward to hearing from the fed chairman, the q and a session. >> later. >> and that will be interesting. we should note and i don't know if the market itself is moving on this very notion that we're discussing on these interesting comments regarding what the financial crisis has done to the economy at large. reducing its growth potential, but the dow has turned negative after going positive. now, it's only a few points lower as we see the fed chairman take his seat there in times square, in new york city. but there's a look at the dow. as the fed chairman speak, we'll break down the headlines. we'll talk to the traders and get their outlook, also, stick around for the bottom of the hour. bar ra is going to make some comments as we lays out in

greater delay these charges of what he calls the most lucrative insider trading scheme ever. in the united states. as you take a live look there at that podium in lower manhattan. we'll be right back. ♪

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the big news in new york city today is is going to be right in that room right there. the economic club of new york when ben bernanke speaks and then the q and a session. we already got some of the headlines from steve liesman who's there today. the is is mr. bern is mr. bernanke saying what investors want to hear? erin, welcome to halftime. good to have you on. >> well, thank you. >> you probably got the headlines here. what are your thoughts on what mr. bernanke is telling the markets today? >> at the point, the most he can do is be an encourager to the regulators and banks. not much he can do with fiscal policy right now he can encourage regulators to revolve the cliff and get the banks to

lend. >> that the slcliff has substantial risks to the economy. i'm curious of your reaction to what he is going to lay out what steve liesman said what he hasn't heard before, this notion of what the crisis has done to the overall economy, if it's lowered the growth potential and how it translates to a stock market. >> right, he's saying that his expectations are more than 2.5%. we've been expecting the gdp to come in at 1 to 2% already. i think most of the market is already expecting that rate and from the stock market, i think that's fairly priced in. we're not expecting any huge run-ups for the end of the year and it's uncertainty at the end of the cliff before we look at the gdp lowering. >> of the substantial amount of money you have under management, 12 billion or so, what are you

doing in the market now with the cliff looming? >> waiting on the sidelines. there's still, we still strongly believe in stable companies, earning companies, dividend p paying companies. we don't think the dividend cuts are going to hurt as much. not every investor is tax sensitive, so we're still looking forward. but there are some industries where we want to see how the regulators revolve the cliff before refunding money in. health care, hospitals and defense spending being the two major ones. >> we hope to have you back on soon. thanks so much. >> thank you. >> as you watch the fed chairman there at the economic club of new york, we'll continue to monitor mr. bernanke's speech. we'll give you the highlights over the course of the show and let you in on some of the q and a session in as well, which is likely to be quite interesting. straight ahead, more details on

what may be the most lucrative insider trading scheme ever.

welcome back.

new information on a developing story. we've been following all morning out of the new york u.s. attorney's office. kate kelly joins us now with the details. what do we know to this point? >> scott, a very tough day for s.e.c. capital and especially for steve cohen, the hedge fund's founder. they have spent recent years fending off -- amid charges that two former employees engaged in insider trading and later destroyed evidence of their behavior, but in the case today, yet another former employee stands accused of insider trading and cohen appears to have been involved in the trades at issue. whether or not he knew he was dealing with will gotten information remains unclear. this case centers on allegations that starting in 2006, an s.e.c. analyst named matthew martoma recommended buying shares of elan and wyeth to only sell them in 2008 based on illegal obtained information about a drug trial that yielded bad

results. sac allegedly made a quarter of a billion dollars and martoma took home a bonus of more than 9 million. they are saying this is the most lucrative insider trading case ever and raises questions about what more is to come. maybe the most detrimental is july 2008 conversations between martoma and steve cohen. the two discussed the pharma positions and cohen agreed to the abrupt sell-off and veiled it apparently lly secrecy. i'm told he just learned about the timing of this yesterday and was quite upset. ul up until now, he has learnsed that the implicated employees -- as well as the law and may do so again here. what he knew about the orgin

remains unclear. >> what's interesting here as well, kate, from the research and the reading i've done leading up to the comments that we're going to get here from the u.s. attorney from the southern district at the bottom of the hour any minute now, is this this unit of sac, this cr intrinsic has been in the cross hairs before. this unit of sac capital. in fact, they had another portfolio manager charge d and sentenced -- >> donald long well. >> he was sentenced to 30 months for insider trading and there was another situation that centered around intrenzic shares of a cougar biotech. this isn't new by any stretch of the imagination. >> that's right, scott. this appears to be an extension of a case that federal prosecutors have been making for years and i think you're right. this example, these two former sac traders were the most recent

high profile folks formerly of sac to be engaged in this case. longwell himself worked at intrinsic as well as martoma. he was arrested by the fbi this morning at his florida home, we're told, but the two of them worked at cr intrinsic. one reason i'm told cohen is is upset today or as of yesterday is that cr intrinsic was not just an isolated unit, it provided research and trading for other parts of the firm, not just what they were doing specifically. it's very troubling information for the firm and for cohen as well and i agree. it would seem to be another shoe to drop in this ongoing investigation. >> let's also be clear, kate, that neither mr. cohen nor sac itself with accused of any wrong doing. this is a gentleman who works for that unit. we have scott cohn on the phone with us.

scott has covered most of the big high profile insider trading cases over the last several years. good to have you on. this is an aggressive u.s. attorney, right? he doesn't mess around. since 2009, he's brought some 72 cases of insider trading. right? >> right. it's worth noting these inv investigations predate him. we're seeing a lot of these investigations being wrapped up as the year comes to an end and prosecutors have to make their numbers, so there's some of that going on, but they struck a rich vein with this insider trading. investigations started back in 2007, 2008. this particular one looks as conduct going back to 2006. the big, high profile win for bararro was raj and the galleon group and a lot of these cases spring from that.

if you're going to look at insider trading on hedge funds, rightly or wrongly, sac is going to be on the radar screen. not that there's necessarily anything going on there, but that's sort of the big dog here, but they keep on getting around the edges of that. >> one thing that might be interesting to point out, both scotts, that is, here is an aggressive u.s. attorney who is dealing with hedge fund and insider trading cases from the very years in which we had the housing bubble, the great financial recession and one criticism in general has been there's a relative lack of criminal cases made against folks who were responsible for the housing bubble and the tremendous losses that resulted from that, correct? >> these insider trading cases are much, much easier to make than any cases of fraud relating to the housing bubble, the financial crisis. an insider trading case, even if you don't have undercover tapes, you have trading records, you have now e-mails.

you have all sorts of evidence that juries tend to buy and the cases are much, much more clear cut than the financial crisis, where the, where you don't have clear evidence yet of wrong doing. >> and you have many cooks in the kitchen putting together a given security, marketing, correct? so you may end up with one or two people, i'm thinking of febreeze tour of goldman sachs, who was a low level guy involved with the structuring of a mortgage-backed security, but he's now at the center of that case. f everything else is is settled. t. >> we're going to take a quick break as we wait for barar to announce what he has called the most lucrative insider trading scheme in history. we will also ybring you headlins from ben bernanke today. potentially market moving ones. there he is making his speech today at the economic club of new york. we'll be right back. if you are one of the millions of men

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what he's telling that audience this new york city today? >> he's telling the audience, you, the watchers of this show, it's a bond friendly world and it's going to remain a bond friendly world. you're going to have to do a search for yield and one disappointing thing that he took a pass on is not saying to d.c., look, you may avoid the fiscal cliff right now, but do not create another one noex next year because in essence, that's all that's going to happen. >> the q and a session is going to be interesting and though it may not have been laid out in his remarks, he may have to get asked about it in which he would make a comment. >> okay, i'm sorry, sounds like you're making an excuse for him though. he should come out as the chairman, independent of all politics, and say look, here's what's good for growth. you want to avoid the fiscal cliff now, fine, but tackle the issues early in 2013, don't create another one because that limits growth. >> he's also stoking the fears of the fiscal cliff and what the

downside may be on that. so every time bernanke speaks, there's an expectation he's bringing cash with him to get out. i don't think he's influencing the market. >> what's the big thing you're going to do in the market? we've had two big days. a reversal of the market, these guys are going to rise above and get something done in d.c. are we going to get a year end rally in the market? we may miss it. >> i'm long. i'm net long, not very short. i'm short stocks like x and short rio and valley, but i'm not as short as i was. i like the banks. you look at the housing data. that's great for the banks. like some technology stocks. not old tech traps like dell or microsoft, but others like sky

works and i'll participate there. >> doc? >> i think what he's giving the half full glass and he's saying okay, if you want to be an optimist and they they can get this deal done, then he sees a lot of upside because even though housing's recovered, labor has not recovered yet. so he's implying very strongly that if they can get this thing done, you're going to see labor markets recover more quickly. just as housing has recovered with these low rates. that's the upside. he's also saying there's that -- hanging over say iing if you dot avoid this, then the whole all bets are off and this thing could be solved. >> but you will see a massive rally if there's an agreement on fiscal cliff. >> undoubtedly. >> as a trader, you wait for that or try to get out? >> that's why i'm somewhat long,

otherwise, i'd be short. >> ben bernanke delivering remarks on the economy in new york city. we will take his q and a session live when "halftime" comes back. americans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future.

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still waiting for the news conference on what's been called the biggest insider trading scheme in u.s. history. you worked at sac i know you

know steve cohen. what do you think about the risk for really an iconic hedge fund manager? >> anybody that's an outside investor, almost half, roughly 13 billion, an outsider investor knows this already, that the sec has been trying to get steve for years and years. you mentioned earlier, there's another firm that also has some members or former members that are under indictment or trial. so here's the deal. sac has 500 people. it's tough to influence and to manage all these people. it's incredibly tough compliance procedures in place. i just don't believe he would jeopardize roughly a 6 to $8 billion fortune for even a few hundred million dollars. >> kate, let's bring you back

in. sac -- at all, let's make that point. we have to start wonderfing abot the reputational risk as i said in my risk. >> it's very big, scott. there are a few key -- ironically has done well in the last couple of years. ten or 11% year to date and -- criticized for underperforming in the s&p for instance, which was on such a tear earlier this year, as well as other investment deals, so they have had a standout performance. about half of their aum is stevie cohen's personally.

he's a very active portfolio manager. he's known for defending his staff. one thing that i'll be listening for in this press conference is the degree to which this hedge fund owner is referred to in the u.s. government is identified as ste vito cohen. we have reason to think it's him, but he's not mentioned in a complaint by name and whether there's any color that's provided, scott, as to what he knew when he spoke to matthew martoma in 2008 about selling their stakes in elan and wyeth. what we knew about the orgin of the information that the drug trial had gone badly and it might be a sell. >> we'll see what he says in a matter of minutes here. we're waiting for that. watching mr. bernanke in the q and a session. we're going to take you there, but first, oaf to brian shactman, who's watching shares of apple today, which staged a

dramatic comeback. >> $25 to the upside yesterday, >> does this tell you there is some doubt as to whether the apple story can continue? you bought the stock, you have no doubt. >> absolutely not. it's healthy to have a modest correction. today is not about apple or technology, today about housing and the financials on consumer discretionary. >> doc, apple? i mean, come on. >> i think it's reasonable that it pulls back a little bit here. wouldn't be surprised if it pulls back into the 50s, the 550s, but on the other hand, i don't see a big catalyst for it to do that, scott if bernanke's testimony remains and questions remain relatively flat. i think this stock is where it should you can.

>> does apple's performance from now until the end of the year depend solely on what the stock market itself does? can apple remove itself from the overall market? >> we talk butted negativity in the market and how much people were using, as joe said, this stock like a piggy bank. they were pulling money out of apple like crazy, basically to feed it and that is partly why it was down so hard. >> on the other side of the break, we will hear from the fed chairman in the q & a session. we will be back in two minutes. scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.

which isn't rocket science. well, if itmr. margin?margin. don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob. i know. welcome back, the fed chairman is now taking questions. let's listen n >> the economic conditions based sort of forward, sort of

guidance. could you explain to us why this is so hard, and in particular, why we can't use suitable words to replace the kind of threshold numbers that you find in formulations such as charles evans and others have advocated? >> alan, as you know, communication in forward guidance policy has been very important for some time. as general matter, when the short-term interest rate, usual policy tool goes zero, where it is, one of the main tools we have for influencing overall financial conditions is providing guidance to the public about where we expect the rate to go in the future. and that forward guidance has evolved over time. we use some qualitative language, even before my chairmanship, considerable period and so on. recently, we have begun to talk about dates. we begin to given a assessment of when we expect policy to become less accommodative, where we expect to begin to raise the

federal funds rate. now, a difficulty with dates, besides the fact that it's not very transparent, is that it mixes together two issues chltz one issue is how long does the fed think that the economy is going to need life support, so to speak, how long is the economy going to be in a weak condition, but also, you know, what's the fed's response to that going to be? what is the so-called reaction function? those two things are conflated with the date and that is a problem with the date and we recognize that. we have tried address that a bit in our language that i mentioned in my remarks going back to september when we said that our date, where we expected the rate to begin to rise was at least mid-2015, but we also made clear that we anticipate raising rates only after the economic recovery has begun to strengthen. so clearly, an important reason why we are looking to hold rates

low for, you know, almost three years is that we want to be particularly sure not to take away accommodation before the economy has established upward momentum, so to speak. now, there are different ways to communicate that information and one possibility would be to provide some specific numbers on what economic conditions would prompt us or at least make us consider the process of removing accommodation and several people on the committee have made suggestions, you mentioned charlie evans, janet yellen has talked about it and so on this is something we are looking at very carefully. it does have the advantage that it would help to distinguish between our anticipation for how the economy is going to evolve and how we react to those conditions. and it would have another advantage, which is that as economic conditions vary you as

news comes in that makes the markets think that unemployment is going to be low -- or high for longer, for example that would automatically lead the markets to adjust rates appropriately. so, there are some definite advantages. there are a number of issues my other colleagues have raised is that the policy is a complex process, as you know. we have an enormous amount of material prepared for us at every meeting, forecasts, detailed data analyses and so on. the question is can we -- >> that news conference in lower manhattan involving the u.s. attorney for the southern district of new york is now under way, where mr. berrera is laying out the charges in what the feds call the biggest insider trading scheme in history against matthew mar toma, charged again, with conspiracy to commit securities fraurksd two count of security

frauds in a scheme the feds say stretched from 2006 to 2008, netted allegedly, 276 million in illegal profits. again, those charges being laid now the lower manhattan by the u.s. attorney for the southern district of new york. now let's go back to ben bernanke. >> the bank's overly tight lending standards. what can the fed do to improve this and, there for example increase mortgage lending, beyond mortgage interest rates? >> so, as ieindicated in my remarks the housing sector has been a major player in this drama, first with the boom and then the collapse and now, playing a role in the recovery, as we hope. in terms of expanding mortgage lending, the growth of the

housing sec to you said beyond interest rate policy, i have to mention interest rate policy. i think one of the strongest things that we can do is maintain low mortgage interest rates. they are at historic lows, as you know, and combined with a 30% decline in house prices across the country, it means we have extensive affordability now for people who are interested in buying new homes. now, the reason i bring this up is that i think there are some positive dynamics that can occur here, in particular, to the extent that the housing market appears to now be moving in the right direction and we are beginning to see increases in house prices. that, in turn, is going to feedback on mortgage learned decisions, because one of the reasons that they are -- they have been keeping mortgage conditions tight is that they have been afraid of further house price declines, a weak economy, unemployment, those sorts of things that could lead to mortgage defaults in the future. so, i think if we can get

ourselves into a positive virtuous circle here with rising house prices, rising construction and improving employment, part of that process would be easing of mortgage lending conditions. moreover, as we keep rates low and as the profitability of mortgage lending goes up, we will see, there is a lot of evidence now that banks are beginning to expand their capacity and their interest in making mortgage loans. so i think the monetary policy part is obviously a very big part of it. we have some other ways of addressing this i guess i would summarize them as regulatory, supervisory and maybe analytical. on the regulatory side, of course, we were very much involved in the writing of the rules for implementing both dodd frank and the basal accords. while those rules are about broad financial stability, many of those rules do affect incentives for